Reprinted with Permission from the Q3 2014 edition of Maritime Professional
demand did not materialize quite as expected. Global deal
counts as shown in
Figure 1
receded by more than 7% in each
of 2012 and 2013 and total reported deal dollar values mir-
rored those pullbacks. One anomaly in the data is the 15%
increase in US deals during this period. This variance was the
result of expiring Bush-era capital gains tax rates at the end of
2012. American M&A markets across most industry segments
experienced this same short-term bump, followed by a rapid
fall in deal activity in early 2013.
Though this phenomenon resulted in lower activity in early
2013, the second half of the year did produce a few deals of
interest, including the $460 million acquisition of Abdon Cal-
lais Offshore by Harvey Gulf International Marine, and Gene-
sis Marine’s purchase of Hornbeck Offshore Transportation’s
(NYSE:HOS) downstream tug and barge assets for $230
million. A notable trend in our chart data is an uncommonly
large jump in deal activity from the first half of the year to the
second, as the market recovered from the tax-driven market
irregularity.
Global View of 2014
Momentum from late 2013 has continued unabated this
year, with strong deal flow in the first half of the calendar year
and a projected strong finish both at home and abroad, based
on trends and averages in previous years. Figure 2 provides
an interesting framework through which to view marine and
offshore M&A transactions on an international level.
The table in
Figure 2
exhibits the number of buyers and
sellers from each world region in the 432 transactions where
such data was reported in the first half of this year. Cross-ref-
erencing the data, a number of highlights emerge about the na-
ture of global M&A transactions in our chosen market. First,
it is clear that two regions dominate deal-making in 2014: Eu-
rope andAsia/Pacific. Furthermore, the numbers show that the
bulk of all deals are completed between buyers and sellers that
are both in the same region. Leading this trend are companies
in the Asia/Pacific region, where 142 deals were closed with
both buyer and seller from that region. The same trend holds
true in each of our global zones, though the total deal counts
are much lower across the board for areas outside of Asia and
Europe.
The data in this table also enable one to identify which re-
gions are net sellers and which are net buyers of companies in
the industry. For example, we see that companies in the Asia/
Pacific region were on the “buy-side” in 173 transactions, but
on the “sell-side” in only 154 cases. Europe almost perfectly
balanced this incongruity in Asia/Pacific, with 153 buys to
175 sells. We famously see this same trend in government
bond purchases, where China reaches out to invest surplus
funds in foreign assets with steady performance. However, it
is interesting to note that though China was present in a large
number of the Asia/Pacific deals, there were significant play-
ers in sizeable transactions from diverse geographies includ-
ing Malaysia, Qatar, Indonesia and The Philippines.
Recent Transactions
There have been several interesting technology-focused
deals this year in the maritime and offshore segments. In June,
TE Connectivity (NYSE:TEL) completed its acquisition of
privately-held SEACON, a provider of systems and connec-
tor technology for the military marine and subsea sectors,
including ROV’s, AUV’s, oil and gas, and oceanographic ap-
plications. Satellite communications systems provider KVH
(NASDAQ:KVHI) made an interesting acquisition in Lon-
don-based Videotel, a producer of training films and e-Learn-
ing services for the commercial maritime industry. Videotel
products enable KVH to continue to provide valuable content
to their critical maritime niche. Finally, Teledyne Technolo-
gies (NYSE:TDY) confirmed its focus on the autonomous
marine vehicle market by entering a strategic partnership with
an investment in San Diego-based Ocean Aero. Ocean Aero is
designing a unique product known as the Submaran, a vehicle
capable of operating in both surface and sub-surface environ-
ments.
Such marine technology deals are notable and interesting,
but the bulk of investment dollars continue to flow to the oil
and gas sector. Nine of the top 10 deals so far in 2014 are
foreign offshore asset deals. Both in the Americas and abroad,
the steady growth of global energy demand in tandem with
ever-improving production technologies should continue to
drive healthy M&A activity for the foreseeable future.
